MEXICO CITY – Mexico's unemployment rate held steady in March at a multiyear low amid solid job creation in the private sector, which kept supporting consumption growth.
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Unemployment among Mexico's 54 million workforce was 3.5% seasonally adjusted last month, practically unchanged from February even as more people sought work, the National Statistics Institute said Friday. Underemployment and informal employment both fell from the previous month.
The March job numbers were "unambiguously good," suggesting the economy has strengthened in early 2017, against expectations, PNC's economist Bill Adams said in a note.
"In January, Mexico had seemed at risk of a recession in early 2017, even if Mexico's trade relations with the United States remained status quo, because of large increases in energy prices and interest rates, as well as sharp drops in business and consumer sentiment," he said.
Employment growth has lowered the jobless rate to pre-2008 crisis levels, supporting household spending, although a recent uptick in inflation has led to declines in real wages as consumer prices outpaced average contract wage raises in the first three months of the year.
Annual inflation was 5.4% in March compared with 3.4% at the end of last year, and is expected to accelerate further in following months.
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"Among the most important determinants of consumption, only job creation remains supportive, with the unemployment rate still decreasing," Bank of America Merrill Lynch's chief Mexico economist Carlos Capistran said in a recent report. "But, in our view, that also will decelerate and be insufficient to sustain consumption growth above 3%."
The number of workers registered at the Mexican Social Security Institute -- a measure of formal private-sector employment -- rose by 140,000 in March to 19 million, and was up 4.6% from a year earlier, according to the Labor Ministry. A separate survey published this week by the statistics institute showed factory employment up 3.6% in February from a year before, with solid gains in manufacturing of transport equipment and computers.
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(END) Dow Jones Newswires
April 21, 2017 12:27 ET (16:27 GMT)